Mountain Sounds Festival has been running since 2014, and this year was due to host Angus and Julia Stone, What So Not and Courtney Barnett, along with a number of other Australian and worldwide artists.

Organisers said that, as of late January, they had budgeted for 11 user-pay police to be on site, but one week out from the festival, they were told they would need to pay "an additional upfront amount of approximately $200,000 for 45 user pay police on a 24 hour cycle". They say this is four times the number they were quoted just weeks ago.

"In 2018, Mountain Sounds ran smoothly, with an attendance of 16,000 people over two days, 11 user pay police and no major drug-related incidents", the statement reads.

They said in the Facebook post that they had been put in an impossible situation as it was unrealistic for them to pull the money together.

Angus and Julia Stone were set to headline the festival next weekend.

Mountain Sounds is the second NSW festival to be cancelled this week.

The Herald understands police attempted to meet with festival organisers in the months leading up to the event and had no response.

At last years event, just 49 of the more than 16,000 attendees were caught with illegal substances.

"We have recently had to look at measures across the board to continue moving forward with the event, whilst still maintaining the highest safety standards and ensuring the quality of the festival experience for patrons and artists aren't compromised", they said in a statement. This came after what organisers described as "unprecedented opposition to the event from the police and the government". In a lengthy statement posted to Facebook, the event organisers write how devastated they are about having to cancel the event.

'The Liberal party's war on festivals in NSW is real and it's robbing you of you freedom and culture, ' the organisers wrote. Both departments have been contacted for comment.

The future of Mountain Sounds Festival beyond 2019 is now unclear, although organisers have pledged to "find a way to continue our passion and commitment in bringing music and arts to the coast".

"We are unfortunate to be in the wrong place at the wrong time when festivals are the new scapegoat of a failed government and their failed war on drugs".

NSW Premier Gladys Berejiklian has repeatedly denied pill testing, but indicated in January she would consider it if shown evidence it could save lives.

Meanwhile, Rabbits Eat Lettuce announced earlier this month that it was relocating to Queensland following NSW Police lodging action in the Supreme Court, leaving the festival "in a fragile financial position after forking out $100,000 to fight last year's action by NSW Police", a statement read.

The Psyfari festival also took aim at the state government on Wednesday when they announced they were cancelling their event.

"REL is in a fragile financial position after forking out $100,000 to fight last year's action by NSW Police and we don't now have the time or finances for another court battle", it said in a statement.

As reported by The Industry Observer, sources close to the festival have said the festival hasn't sold enough tickets, and are struggling to compete with the new restrictions placed on festivals in the state.

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